Sports (entertainment etc) and surplus value

Rahul Mahajan rahul at peaches.ph.utexas.edu
Thu May 23 10:56:50 MDT 1996


>
>                Rahul,
>
>
>
>        10 million dollars a year is a figure thrown around as an economically
>reasonable salary for Michael Jordan.  He makes about 4.5 million.  Michael
>Jordan, whatever money he makes, cannot be categorized as anything but labor.
> Comparing him to CEO's is ridiculous.  CEO's enforce owner authority.  They
>create essentially no value (compared to their salaries) whatsoever.

Logic, my boy. The statement that athletes are similar to CEO's in the fact
of having higher salaries than it would seem free competition would warrant
hardly implies that the role of athletes and CEO's in the economy is the
same. I believe that if you wish to consider the 10 million figure
seriously, you can't ignore the other 90% of MJ's income. I doubt he is
worth 10 mil just to the Chicago Bulls.

>
>        Sports is actually the clearest example of that.  We don't go to
>the ball-parks to see George Steinbrenner or Marge Schott (except maybe to
>try and get a clear shot at them).  We go to see Cecil Fielder swing for
>the fence, or Ken Griffey Jr. pull one off the fence.  The difference
>between professional athletes and regular workers is that, because there
>is actually a market in this labor market, they get something which
>approaches the economic value they create.

Nonsense. What does "there actually is a market" mean? There's always a
market, the question is simply who is better at forming blocs to have
things their way, the workers or the owners. The sports unions have been
remarkably successful, due in part to the idolatry of tens of millions of
fans across the country.


>        Your definition of rents disregards the fact that you can always
>get someone to do the job for less, or, as even Michael Jordan is now
>demonstrating by promising his allegiance to Chicago despite impending
>free-agency, make them stay on for less.

Absurd. It's one thing to say that the law of supply and demand does not
always accurately predict wages or the distribution thereof, quite another
to say that it always predicts a lower wage than that which actually
obtains. Lower the wage enough, and you will lower demand for employment,
no doubt about it. If you're talking about sports, your statement is
largely true, which simply means it *is* a situation of high economic rent.

Rahul




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